Allied Farmers says it is close to selling another ex Hanover loan that, if settled, will fully clear all debt facilities with Westpac.The rural and financing company is not disclosing the identity of the asset but said it was contained within subsidiary
Allied Farmers says it is close to selling another ex Hanover loan that, if settled, will fully clear all debt facilities with Westpac.
The rural and financing company is not disclosing the identity of the asset but said it was contained within subsidiary Allied Farmers Investments.
Allied had entered into a conditional agreement with an undisclosed party, the agreement was binding and subject only to final due diligence and legal documentation, the company said in a statement to the NZX.
Proceeds from the sale would be used to fully repay “all debt facilities” with Westpac, with the balance to meet other short-term obligations within the Group.
Outgoing managing director Rob Alloway said it was a positive step in the company’s restructuring plan. Allied recently reported a year to June 30 loss of $77.6 million.
Senior debt to Westpac was recorded at $16.5 million at June but had since been reduced to $1.65 million after Allied negotiated early settlement on a sale of its acquired Queenstown Five Mile development and received $3.75 million from the receivership of the Maison Reeves Condominiums in the US.
Aside from the senior debt, Allied Farmers also has borrowings on property assets of $44.26 million.
Much of this relates to assets transferred to Allied Farmers that had formed part of the Hanover shareholders’ support package.
It is unclear how much of this debt is owed to Westpac as other lenders are also in the mix.
Allied acquired the loan book of Hanover and United Finance last December ascribing a value of $396 million. This has since been revalued at $94.5 million.
The company said it expected to make an announcement late next week on the sale of the loan and would include an update on continuing funding arrangements.
Allied was forced to renegotiate funding with Westpac after Allied Nationwide Finance collapsed into receivership in August.
